KPMG: Businesses making little progress with skills shortage

Friday 6 June 2014

Despite constant reports detailing the lack of skills across multiple industries, it seems businesses have made little progress in the war for talent.

Research from KPMG suggests that there have been few forward steps taken when it comes to ensuring organisations can harness the skills they need.

Robert Bolton, co-leader of KPMG's Global HR Centre of Excellence, explained: "In 2001, the focus was on attracting and retaining ‘high potential’ and ‘high performing’ employees. It’s an approach that has become deeply ingrained for many companies.

"In 2014, however, 66 per cent of respondents are telling us it’s much more important for organisations to have a holistic approach to talent management that addresses the needs of all employees as well as those in critical roles; roles that are not defined by hierarchy but by position in the value chain.”

This is the result of a "broad-based shortage of skilled workers", globalisation, competitive pressures and changing expectations among younger skilled workers.

According to KPMG, these findings have to be seen as a wakeup call for HR managers, who have been accused of clinging to old fashioned approaches to talent management.

"Addressing skill shortages throughout the entire organisation, and not just at the most senior levels, should be a top priority in 2014 and will become critical over the next two years," Mr Bolton said.

In a recent webinar hosted by the Recruitment and Employment Confederation, the skills shortage was identified as one of the major challenges facing businesses and demand for workers is high. Indeed, May's 'Report on Jobs' showed that the availability of staff declined at the fastest rate since October 2004 for permanent candidates and the greatest speed since December 2000 for contractors. This is causing pay rates to rise for both permanent and temporary workers.

A sustainable solution for the talent gap is needed to ensure companies can continue to grow over the long-term.

Contractors will be a crucial part of this, giving businesses access to flexible, highly-skilled labour.

Mr Bolton also claims that businesses that change the status quo when it comes to talent management will find themselves ahead in the war for talent.

He explained that many top companies are currently employing "powerful new data analysis capabilities" to help them understand their existing performance and improve their people practices over time.

"There’s a real opportunity for companies to create a differentiated approach for the HR function, one that is a demonstrable driver for the business," he said.

Mr Bolton concluded that those who do not take this opportunity will fall behind in the war for talent. This means that their company is likely to hit a ceiling in their growth trajectory.

It will also be important to create more diversity on the top table. Businesses are still struggling to get women on the board. Among the FTSE 100 companies, only 20.4 per cent of boards are made up of females. This is five percentage points below the target of 25 per cent by 2015.

By Victoria McDonnell

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